The UK regulator plans to increase the frequency it adjusts the energy price cap to every three months instead of every six.
Changing the price cap level more often would help consumers to take advantage of falling wholesale prices more quickly, Ofgem said in a statement Monday. It would also mean higher prices filter through bills quicker.
“Today’s proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers,” said Jonathan Brearley, chief executive officer of Ofgem.
The change would also help energy suppliers more accurately predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, Ofgem said.
UK gas prices have dropped 13 percent since the start of the year as supplies of liquefied natural gas arrive at ports, easing a crunch that has been driving up energy prices since last year.
The decline is welcome news for millions of homes across the nation suffering from the cost-of-living crisis, with the price of everything from electricity to food and petrol is rising sharply.
Ofgem will consult on the plans with the aim to have the changes brought in by October, when the next adjustment kicks in.
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